Burnham MUST overhaul business taxes to tackle Britain's 'catastrophic' youth unemployment crisis

Andy Burnham has been urged to tear up hated property taxes to help business tackle Britain’s youth unemployment ‘crisis’.

The boss of shopping centre owner Landsec said the growing number youngsters not in education, employment or training – so-called NEETs – was ‘a catastrophe in slow motion for our economy’.

And in a plea to the Prime Minister and Chancellor ahead of next month’s Budget, he called for sweeping reforms to the business rates system to give firms ‘the capacity to create entry-level jobs’.

Writing in the Daily Mail online, Landsec chief executive Mark Allan said high street retailers, hospitality and leisure operators traditionally offer many of these opportunities but have been ‘hit hardest by rising employment costs’.

Allan – whose sites including Bluewater in Kent, Liverpool One and Piccadilly Lights in London’s West End – also pointed out these companies ‘continue to shoulder a disproportionate share of the business rates burden’.

Andy Burnham has been urged to overhaul business rates to help nearly one million NEETs - youngsters not in employment, education or training - find work

Calling for a tax on rents to replace business rates, which is based on a property’s value, he said: ‘If we want to see more young people entering work, we must reduce the burden on the sectors most likely to employ them so that they can invest and recruit with confidence.

‘Policy reform is desperately needed to support investment and create the conditions in which more opportunities can be generated for those at the beginning of their careers.’

He added: ‘It’s become increasingly clear that addressing the NEET crisis can’t be viewed solely through the narrow lens of skills and education.

‘It should go without saying that businesses also need the capacity to create entry-level jobs, something that has been made harder by the decisions taken by successive governments.’

Allan pointed to Labour’s £25bn national insurance tax raid on employers and inflation-busting increases in the minimum wage – both of which have pushed up the cost of hiring and retaining staff.

It is feared youngsters are bearing the brunt of the jobs crisis – with nearly one million aged 16 to 24 now classed as NEETs.

His comments come as the High Street and hospitality continue to reel from Rachel Reeves’ botched business rates reforms which left many firms facing sharply higher bills.

Burnham has promised his own shake-up – with pubs, clubs and live music venues receiving a 20pc cut to their business rates bill – but business leaders are calling for full-scale reform.

Allan said his proposals ‘would tax commercial property according to the rent actually being paid’ rather than on ‘an approximated value cooked up by a government agency every three years’.

He argued this would be ‘simple, transparent, and aligned to the real economic activity of the shops and restaurants who give many young people their first chance’.

It would also mean taxes would be lower in lower rent areas, meaning ‘it would provide the biggest boost to the places that need jobs and investment the most’.

And this could feed into Burnham’s desire for more fiscal devolution, with mayors given the freedom to decide rates for their area within a national framework.

Allan said: ‘I know that this idea doesn’t address all the issues with our business rates system. But frankly none of the alternatives floated so far seem to stack up.

‘It’s time for a rethink, starting from first principles. If ministers are serious about supporting young people, they must give the businesses most likely to offer them their first job room to invest. Reforming business rates would be a practical place to begin.’

Give firms the capacity to create entry-level jobs 

By Mark Allan, chief executive of Landsec

Like many people, one of my first jobs was in retail – bagging up potatoes. Today, as chief executive of Landsec, I often think back to that first experience of the working world, how important it was to my development and how much it has taught me. Not least the value of turning up on time and the joy of earning your own money.

Landsec boss Mark Allan

It’s why I’m so concerned that many young people today are being denied that same first step. The fact that nearly a million people aged 16 to 24 are not in education, employment or training (NEETs) is a catastrophe in slow motion for our economy and, perhaps more importantly, the fabric of our social contract.

Many of our customers, including some of the country’s best loved retailers, have been the traditional first step into employment for young people. Through our close working relationship with brands and charities such as Spear, Circle Collective and Ahead Partnership, we have a good sense of the issues and how to tackle this challenge.

It’s become increasingly clear that addressing the NEET crisis can’t be viewed solely through the narrow lens of skills and education. It should go without saying that businesses also need the capacity to create entry-level jobs, something that has been made harder by the decisions taken by successive governments.

Employers have already absorbed higher National Insurance contributions and increases in the minimum wage. Combined with the pressures of operating in the current economic environment, this has reduced their ability to invest - particularly in creating opportunities for people at the start of their careers.

The Government is, of course, bound by its manifesto pledges and businesses acknowledge that these decisions are unlikely to be reversed. But if we want to see more young people entering work, we must reduce the burden on the sectors most likely to employ them so that they can invest and recruit with confidence.

High street retailers, hospitality and leisure operators remain among the largest providers of entry-level opportunities. But they’ve been hit hardest by rising employment costs and, crucially, continue to shoulder a disproportionate share of the business rates burden. Policy reform is desperately needed to support investment and create the conditions in which more opportunities can be generated for those at the beginning of their careers.

This isn’t a controversial idea. The government has long promised reform but, regrettably, the last set of changes made in 2024 only placed more burdens on the sector. A new tax threshold was also introduced for large properties. This was intended to shift the tax burden to real estate that the government sees as low social value – out of town warehousing, for instance. But because the system is fundamentally broken, this blunt instrument has ended up impacting the large shops – we call them anchors – that draw people to the high street in the first place.

There is a better way.

Landsec owns shopping centres across Britain including Bluewater in Kent

A commercial property levy would tax commercial property according to the rent actually being paid. No hypothetical valuations. No complicated assumptions. No endless disputes. A VAT on commercial rents, collected by landlords and paid to the state. Simple, transparent, and aligned to the real economic activity of the shops and restaurants who give many young people their first chance. Not an approximated value cooked up by a government agency every three years.

And crucially, it would provide the biggest boost to the places that need jobs and investment the most. Where rents are lower, so too would be the tax burden.

There’s also an opportunity for a commercial property levy to support this government’s ambition for greater fiscal devolution. National government could establish upper and lower limits – perhaps 25 per cent and 30 per cent – while giving mayors the freedom to choose the right rate for their area within that framework. This would give local leaders the opportunity to genuinely shape their communities.

I know that this idea doesn’t address all the issues with our business rates system. But frankly none of the alternatives floated so far seem to stack up.

It’s time for a rethink, starting from first principles. If ministers are serious about supporting young people, they must give the businesses most likely to offer them their first job room to invest. Reforming business rates would be a practical place to begin.

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